Foundation pushes back on Manchin’s bitcoin-ban proposal

Bitcoin ain’t a bad thing – in fact, there’s a whole lot of good in the cryptocurrency.

That’s the message in a letter from Bitcoin Foundation general counsel Patrick Murck to Sen. Joe Manchin, a West Virginia Democrat who on Wednesday called for federal regulators to ban bitcoin. Manchin’s call came after the meltdown of Japan-based bitcoin exchange Mt. Gox.

Not so fast, Murck says in a polite, but firmly worded letter to the senator.

“We believe that the failure of one foreign-based exchange should not darken the prospects for bitcoin businesses in New York, California, Washington state, and all over the country, including a restaurant in West Virginia that announced late last year that it is accepting payments in bitcoins,” Murck wrote.

Murck’s name will be familiar to cryptocurrency-watchers. He spoke before a Senate committee last November about bitcoin, and recaps his testimony in the letter to Manchin. He said it’s got potential to strengthen privacy protections for the law-abiding and provide a stable money supply for those in countries where the currency is poorly managed.

Murck says he recognizes that there are risks with bitcoin, “but we are confident that they are not as dire as your letter suggests.” In his letter to Treasury Secretary Jacob Lew, Federal Reserve Chairwoman Janet Yellen and other regulators, Manchin says the cryptocurrency has become a haven for individuals to buy black market items and allows anonymous purchase of drugs and weapons. In response, Murck points out the demise of the site Silk Road demonstrates bitcoin isn’t “a magic cloak for crime.”

Questioned by Manchin on Thursday during a Senate hearing, Yellen said: “the Fed simply does not have authority to supervise or regulate bitcoin in any way.” She said it’s appropriate for Congress to question the right legal structure for regulating the cryptocurrency, but added doing so wouldn’t be easy since there’s no central issuer to regulate. See recap of live blog of Yellen hearing.